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Treasury agrees to release names of most Paycheck Protection Program borrowers – Financial Times

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Treasury agrees to release names of most Paycheck Protection Program borrowers  Financial Times

The Trump administration has said it will release the names of companies that received a loan of $150,000 or more from the government’s bailout fund for small businesses.

The move comes amid criticism that the $670bn Paycheck Protection Program has unfairly benefited large banks and companies.

On Friday Steven Mnuchin, Treasury secretary, and Jovita Carranza, head of the Small Business Administration, announced the names would be released following an agreement with Republican and Democratic lawmakers.

“I am pleased that we have been able to reach a bipartisan agreement on disclosure which will strike the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors and independent contractors,” Mr Mnuchin said.

Ms Carranza added: “We value transparency and our fiduciary responsibility to ensure American taxpayer funds are used appropriately.”

The officials did not say when the list of companies would be publicly released. Mr Mnuchin had already committed to auditing all loans of more than $2m.

The announcement follows fierce criticism from several Democratic lawmakers who warned in a letter to Mr Mnuchin and Ms Carranza this week that the administration was not being transparent about what share of the loans was going to rural or underserved communities.

“Contrary to Secretary Mnuchin’s recent testimony, there is nothing ‘proprietary’ or ‘confidential’ about a business receiving millions of dollars appropriated by Congress, and taxpayers deserve to know how their money is being spent”, and whether the funds were “helping vulnerable businesses and saving jobs, or are being diverted due to waste, fraud, and abuse”.

On Friday Jim Clyburn, the Democratic chairman of the House select subcommittee on the coronavirus crisis, said he was “pleased” by the Treasury’s actions but criticised it for not also releasing the names of companies who had received loans of less than $125,000.

“This is far from the full transparency that American taxpayers deserve. Even when this data is released, Treasury and the SBA will still be withholding the identity of nearly 4m PPP recipients — that is more than 85 per cent of all recipients, who collectively received more than $100bn in taxpayer money,” Mr Clyburn said.

A senior executive at one of the biggest PPP lenders said it had “thousands” of people repay loans or withdraw applications because of updated guidance on who the loans should go to and increased scrutiny of larger loans. Shake Shack and Ruth’s Chris Steakhouse publicly pulled out of the programme after a public backlash; most of those who returned funds were “not names you’d recognise”, the banker said.

Separately, Politico, the US news outlet, this week found at least four congressional representatives who either own or have families ties to companies that had been approved for PPP loans, adding to criticism of the programme.

More than $512.2bn has been loaned through the programme. About a third of the funds have been distributed by just 34 big banks, which have more than $50bn in assets, while about 19 per cent have been distributed by lenders with $10bn-$50bn in assets, and 44 per cent have been distributed by lenders with less than $10bn in assets.

Democrats have repeatedly expressed concern that not enough loans were being distributed by community development financial institutions — or private banks that focus on low-income businesses. The SBA even briefly limited access to the programme to banks with less than $1bn in assets in a bid to make sure smaller lenders were not locked out as bigger banks put through tens of thousands of applications in bulk.

JPMorgan Chase and Bank of America have handed out $28.6bn and $25bn worth of loans respectively, roughly double that of the programme’s next biggest lender, PNC Bank.

By contrast, less than $3bn has been distributed to community development financial institutions in the second round of funding, which has paid out more than $189bn. The SBA had set aside $10bn for those type of institutions.

Overall, the government has distributed 4,800 loans worth more than $5m. But about two-thirds has been in the form of loans of $1m or less.

 

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